The present value of an ordinary annuity of $350 each year for five years, assuming an opportunity cost of 4 percent, is ___
1 answer:
We can calculate it by PVOA table.
PVOA means present value of an ordinary annuity.
PMT = $350
PMT means recurring payment.
time = 5 years and interest rate is 4%
So n = 5 and i = 4%
So we can calculate PVOA as
PVOA = PMT times (PVOA factor for n = 5 and i = 4%)
(PVOA factor PVOA table)
So present value is $1558.2
PVOA means present value of an ordinary annuity.
PMT = $350
PMT means recurring payment.
time = 5 years and interest rate is 4%
So n = 5 and i = 4%
So we can calculate PVOA as
PVOA = PMT times (PVOA factor for n = 5 and i = 4%)
So present value is $1558.2
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Hey refer to attachment!!!
Draw straight line from 220 (in thousands ) to the plotted line. Draw line parallel to x-axis from point where it touches the plotted line to the y -axis.
It'll automatically meet at 500 which is the answer..
All you need to do is to see the graph carefully.
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Draw straight line from 220 (in thousands ) to the plotted line. Draw line parallel to x-axis from point where it touches the plotted line to the y -axis.
It'll automatically meet at 500 which is the answer..
All you need to do is to see the graph carefully.
Hope it helps *_*